EU-Inc: Creating a Single Market for Entrepreneurs with a 28th Regime

Hi! Today is September 29, and here is the EU news you need for the week. Feel free to share this newsletter with friends and colleagues, and follow us on Twitter and LinkedIn.

Based in Brussels, Kay Jebelli is Senior Director for Europe at the Chamber of Progress, a progressive tech-industry association. Kay previously worked at the Computer & Communications Industry Association and has over a decade’s experience working as a competition lawyer including in private practice and at DG Competition.

If you’ve been on LinkedIn lately, you’ll have found it impossible to miss the rush of European founders, technologists, and investors clamouring for EU-Inc, a new European legal entity to rival Delaware, and create a true single market for entrepreneurs.

Genesis

It’s an idea that is a long time coming, and has been stifled by legacy interests in the past, but which now has a groundswell of support, not only from Europeans experienced with building companies abroad and driven to duplicate their success here, but from the highest levels of the European Commission, who see it as essential to the post-Draghi-report competitiveness mandate.

The idea is simple: Europe needs a modern, harmonised legal form that allows startups to incorporate once and scale across the EU, without needing to duplicate paperwork, legal advice, and governance structures in each of the 27 Member States.

The so-called “28th regime” would be a supranational company form designed to cut red tape, reduce administrative friction, and finally deliver on the promise of a single market for entrepreneurs.

That might sound like an obvious fix, but the reality for many European founders today is anything but simple. Fragmented legal frameworks, byzantine notarial processes, and overlapping national requirements have created a system in which even launching a company is more exhausting than exciting.

There are now well-known stories of early-stage founders in Germany spending tens of thousands of euros each year in notary fees just to incorporate or accept investment, while pages of governance documents are read aloud to them in the presence of a legal official.

Investors, especially those from outside the EU, are shocked to find that the act of investing in a startup requires the same ritual. It’s an exhausting process, out of step with the digital world startups actually operate in. In the time it takes to navigate these hurdles in Europe, a Delaware C-Corp is already founded, funded, and off to market ten times over.

This friction doesn’t just slow startups down, it bleeds into the broader economy. Fewer high-growth firms means fewer successful exits, fewer reinvestments, and less dynamism overall. The long-term opportunity costs are staggering.

It’s not the first time Europe has tried to create a supranational corporate form. The Societas Europaea (SE) was launched in 2004 with the goal of enabling cross-border operations. But it fell flat for startups. The SE required firms to already have a presence in multiple countries before incorporating, included rigid governance structures, and required capital levels far out of reach for young companies. Instead of replacing national complexity, it layered a European one on top.

What is EU Inc. about?

The 28th regime, with the EU-inc proposal the most concrete and start-up supported interpretation, is a different kind of project.

Born out of startup frustration, it is crowdsourced and community-led. A public petition and detailed proposal have drawn together over 600 VCs, 9000 startups, and 20 associations, coalescing around the idea of a single digital-first company form that would allow for seamless operation across the EU.

Backers include some of the most important investors in European companies, as well as a range of start-up associations, who have long highlighted the costs of regulatory fragmentation for Europe’s competitiveness.

EU‑Inc would be fully digital from day one: setup, governance, reporting, entirely in English and online. It wouldn’t require national duplication. It would exist alongside national legal forms, but would simplify cross-border operations, such as employment and capital flows. It could also standardise the investment process, and establish a unified employee stock options program to share startup success more widely.

Political support is also building.

In her September 2024 Mission Letters, President von der Leyen tasked Commissioners with closing the innovation gap and delivering a more competitive Europe, with the 28th regime often mentioned in the same breath.

The Commission has launched a Call for Evidence, open for public comment until 30 September 2025 (so it’s not too late). A legislative proposal is expected in early 2026.

Meanwhile, the European Parliament is working in parallel. The JURI Committee is drafting a legislative-initiative report, with René Repasi as rapporteur. However, the current draft has been met with disappointment by many in the startup community, who see it as too cautious and too narrow in scope.

MEP Axel Voss has submitted amendments to strengthen the text, and debate on the final version is set to begin on 13 October, with a committee vote expected in mid-November ahead of a year-end plenary vote.

Should it only be for startups?

As the debate continues, one big question looms: should this new company form be limited to “innovative” startups?

Many in the ecosystem argue no, and they’re right. While it’s understandable that a narrower scope is more politically palatable, it would be a mistake to include limitations from the start.

Europe should be aiming to attract global founders, scale-ups, SMEs, and international entrepreneurs looking for a stable, rules-based market to launch and grow. A more expansive regime would send the right signal: that Europe is open, ambitious, and willing to design 21st century institutions for 21st century companies.

The opportunity couldn’t be better timed. In a world marked by geopolitical fragmentation, growing regulatory divergence, and rising barriers to talent mobility, Europe can become a haven for builders, talent, and investors.

After years of EU-level hesitancy, there is now a chance to do something bolder, with overwhelming grassroots support.

Policymakers can change the institutions’ relationship with founders and see them not as photo opportunities at best, or pesky disruptors at worst, but as the force that will drive Europe’s future competitiveness. And it all boils down to the EU’s original mission, truly completing the single market.

APPLE • “The DMA should be repealed and replaced with a more suitable legislative instrument”, Apple said in a response to a consultation organized by the European Commission on the Digital Markets Act (DMA).

Apple published a statement highlighting the negative impacts of the DMA on European users of its products, tying DMA-related obligations to the postponement of features such as Live Translation and iPhone Mirroring.

The company also pointed to increased risks tied to the obligation to allow third-party marketplaces and the collection of sensitive iPhone data due to the DMA.

“We are not surprised by Apple’s lobbying argument asking us to repeal the DMA (…). Apple has constantly challenged every bit of the DMA since its entry into force,” emphasized Thomas Regnier, a Commission spokesperson.

TRADE • On 23 September 2025, the EU and Indonesia concluded their negotiations on a free-trade agreement — more specifically, a Comprehensive Economic Partnership Agreement (CEPA) and an investment protection treaty. The deal is part of the EU’s strategy to diversify trade partners, following the Mercosur accord and alongside talks with India.

The agreement eliminates nearly 98.5% of Indonesian tariffs on European goods and grants EU firms greater access to services markets such as telecoms and IT. Over 200 European geographical indications will be protected, directly benefiting food and agriculture sectors.

A protocol on palm oil creates a dialogue platform to align production with the EU’s anti-deforestation rules (whose implementation has been delayed — see next article), yet critics argue it falls short of doing so.

Although Indonesia is only the EU’s 33rd trading partner, with 27.3 billion euros traded in 2024, the deal secures access to critical raw materials such as nickel and cobalt while opening a market of 280 million people.

The deal must still be approved by the Council, ratified by the European Parliament and national chambers, before it can enter into force.

DEFORESTATION • The entry into force of the EU’s deforestation regulation (EUDR) will be postponed a second time, Environment Commissioner Jessika Roswall announced last week.

Last year, the deadline had already been pushed back from 30 December 2024 to 30 December 2025 following strong opposition by EU trading partners such as the US, Indonesia and Brazil. The new application date is now expected to become 30 December 2026.

The EUDR bans the sale or export of any product linked to deforestation, covering mainly cattle, cocoa, coffee, palm oil, rubber, soy and wood. Companies must demonstrate that goods are 100% “deforestation-free”, meaning not sourced from recently cleared land nor linked to forest degradation.

Roswall cited technical problems with the IT system for companies’ due diligence as the reason for the delay. Yet the timing has fuelled suspicion that it is a political move to ease partners’ concerns.

After the Turnberry trade deal, the EU pledged to “address the concerns of US producers and exporters”. A free-trade deal with Indonesia — the EUDR’s harshest critic — was concluded last week.

Last week wasn’t a good week for forests: on 23 September, the European Parliament’s environment and agriculture committees rejected a regulation establishing a forest-monitoring framework. Right-wing MEPs, joined by some liberals from Renew, voted to reject the regulation proposal, arguing that it imposed excessive administrative burdens. The rejection in committee is seen as a strong signal ahead of a plenary vote.

UKRAINE • On 25 September 2025, the European Commission unveiled a proposal for a 140 billion euro loan to Ukraine, guaranteed by frozen Russian assets — mostly held at Euroclear in Brussels. Kyiv would only repay once the war ends and Moscow provides reparations.

The scheme hinges on the semi-annual, unanimous renewal of EU sanctions on Russia: a veto, notably by Hungary, would force the EU to return the funds to Moscow, leaving Member States to cover the loan.

To avoid this, the Commission wants to switch to qualified majority voting for the renewal of the freezing of Russian assets, using the 19 December 2024 European Council conclusions which state that assets should remain frozen “until Russia ceases its war of aggression against Ukraine and compensates it for the damage caused by this war.” How this could justify overriding unanimity remains unclear.

Belgium, home to Euroclear, is particularly alarmed: if sanctions were lifted or Russian legal action succeeded, up to 185 billion euros could be returned. Brussels warns this could undermine legal certainty in the financial sector and is therefore demanding collective guarantees from Member States.

The proposal will be discussed today by EU leaders in Copenhagen and again at the European Council in late October.

• In the FT, Martin Sandbu explains why creating a “28th regime” of European company law is essential to allow businesses to fully benefit from the single market.
• In a speech at the ninth annual conference of the European Systemic Risk Board (ESRB), Adam Posen, president of the Peterson Institute for International Economics, explained that Europe is well-positioned to face financial stability risks linked to changes in the international trading system.